Smartphones expected to outship feature phones for first time

SAN FRANCISCO—Shipments of smartphones are projected to exceed shipments of feature phones for the first time this year, according to International Data Corp. (IDC).

Vendors are projected to ship 918.6 million smartphones in 2013, just over 50 percent of the total forecast for all mobile phone shipments, according to IDC's worldwide mobile phone tracker report.

IDC (Framingham, Mass.) cited falling smartphone prices and the rollout of 4G wireless networks among the trends enabling the projected milestone. By the end of 2017, IDC forecasts 1.5 billion smartphones will be shipped worldwide, which equates to just over two-thirds of the total mobile phone forecast for the year, according to the firm.

To date, much of the world's smartphone shipments were a direct result of demand in mature economies such as the U.S., IDC said. But the balance of smartphone demand is gradually shifting to emerging markets, where smartphone user bases are still relatively small and economic prospects are higher, IDC said. Smartphone shipments to China, Brazil and India will comprise a growing percentage of the device type's volume, IDC said.

China, which supplanted the U.S. last year as the global leader in smartphone shipments, is at the forefront of this shift, IDC said.

"While we don't expect China's smartphone growth to maintain the pace of a runaway train as it has over the last two years, there continue to be big drivers to keep the market growing as it leads the way to ever-lower smartphone prices and the country's transition to 4G networks is only just beginning," said Melissa Chau, a senior research manager for IDC in the Asia/Pacific region. "Even as China starts to mature, there remains enormous untapped potential in other emerging markets like India, where we expect less than half of all phones shipped there to be smartphones by 2017, and yet it will weigh in as the world's third largest market."

Brazil is another market where smartphone growth will remain high over the course of the forecast as its economic fortunes improve, IDC said. "Brazilians have yet to turn in their feature phones for smartphones on a wholesale basis," said Bruno Freitas, consumer devices research manager at IDC's Brazilian outlet. "The smartphone tide is turning in Brazil though, as wireless service providers and the government have laid the groundwork for a strong smartphone foundation that mobile phone manufacturers can build upon."

According to IDC, China will easily remain the top global market for smartphones in 2013. The firm expects smartphone growth in the U.S. to level off in the years ahead now that smartphone users constitute the majority of all mobile phone users in the country.

It's been an assertion of mine for a while that it won't be long before every phone will be a smartphone because it *can* be.
Previous distinctions between smartphones and feature phones revolved around costs. Feature phones were cheaper, because the components that made them were cheaper.
As the components become increasing faster, smaller, and cheaper, what is possible at the same manufacturing cost grows. Yesterday's high end phone is today's middle-of-the-pack entry, and that trend will only continue. We are seeing low end phones from places like Nokia that would have been considered smartphones 5 years ago.
The distinctions between phones are increasingly defined by software, not hardware.
I'm beginning to wonder when we'll see "brilliant" phones being pushed as the next step beyond smartphones, and what feature sets they'll offer to justify a price premium.